AUD/USD is starting this week on the back foot, but dips sub 0.6900 were supported late last week. The pair last tracked just 0.6900, around 0.45% below NY closing levels. Broader USD sentiment is firmer, although AUD is modestly underperforming the rest of the G10 complex. The exception is NZD, with the AUD/NZD cross up around +0.20% to +1.1080.
- For AUD/USD, be mindful that the Friday low was around 0.6892, beyond that is Thursday's low of just under 0.6860. On the topside, note the 50-day EMA comes in at 0.6957.
- Cross asset signals are mixed today. US equity futures dipped but are recovering. AUD/JPY is down smalls on the day, back sub 94.30. Regional equities have opened up mixed, we aren't seeing weakness across the board though. The Kospi and Australian shares are modestly higher, offsetting to some degree the negative Japan lead.
- Oil is higher, but gold is lower, in line with a firmer USD.
- Yield differentials are moving against AUD/USD, but the 2yr spread remains within recent ranges, last at ~-35bps.